Providing Electric Steel Price Direction Transparency
Providing Electric Steel Price Direction Transparency
WHAT? A Directional Index
A compilation of the price change in $ per tonne indicating the direction and magnitude of expected electric steel pricing for the current month and 2nd month forward.
FROM? Producers & Importers
Steel-Insights Index TM, LLC (in partnership with an independent IT provider) will ask and expect participation in the program from all of the producers of Electrical Steel in a region, starting with Europe.
HOW? Privately Distributed Under Confidential Contract
On the 1st of each month, participants will be asked to provide their “average transaction price” (ATP), fob mill, for three representative grades including a low grade NOES, a medium grade NOES and a 0.25 mm EV grade NOES.
We are including a wide range of grades in order to properly reflect the different cost and market influences, which change with different grades.
The ATP will be the average price for each grade for delivery in the following month and 2nd month forward.
If the participant doesn’t sell one or any of these grades in this region, then they won’t enter a price for that grade.
The method used to establish the ATP for each grade is up to the participant to determine. One might chose to use the average price of the three largest customers for this grade, or the total invoices for the grade divided by total dollars, or some other defined method. This will allow flexibility for suppliers to define their own strategies for things like thickness and width extras, depending on the grade and the region of sale.
This ATP determination will be tied to a commitment to follow the same procedure each month for continuity, which will be audited by an independent auditor outside of the process to ensure adherence to the procedure.
WHY? Filling An Industry Need
For years, customers and producers in the electric steel industry have been asking/pleading for some form of pricing indicator that can be used as an independent and verifiable tracking mechanism for adjustment of prices, particularly with regard to long-term contracts.
There are many problems with Indexes used to track HRC and CRC which have created difficulties for both producers and consumers.
We have developed an industry grounded product that will provide a major benefit to the stability, growth and competitiveness of the Electric Steel Industry.
For additional details download the brochure here.